By Shilpa Sharma
A Brand is no longer what we tell the customer it is – It is what customers tell each other it is “ – Scott Cook
Welcome to the age of consumerism where user-generated content dominates the brand marketing field. This is facilitated by the country’s large, growing internet user base, driven by rising smartphone ownership due to the availability of budget cell phones and cheap data rates.
With the development of Web 2.0 and the increasing consumption of digital media, the need for the creation of digital assets is increasing. In response, companies have been shifting their advertising spend to online channels. However, despite increased spending, the effectiveness of digital advertising has been on a decline due to changes in consumer behaviour. In the current market scenario of changing trends, marketers are exploring newer ways to attract and influence consumers.
And, influencer marketing is playing a crucial role in this area since the last couple of years. Influencer marketing is becoming the fastest-growing marketing channel for brands, surpassing other strategies like organic search, paid search, affiliate marketing, and email marketing. More brands worldwide are embracing influencer marketing to broaden their audience and drive business leads.
According to Influencer Marketing Benchmark Report by Influencer Marketing Hub, the market grew from $1.7 billion in 2016 to $9.7 billion in 2020 and soared to $13.8 billion in 2021 globally! And now, it is set to grow to approximately $21.1 Billion in 2023! Marketing spends on influencers in India reached about $400 million in 2022 and is expected to increase to up to $3.5 billion in 2028, according to Redseer Strategy Consultants.
However, the landscape of influencer marketing is changing rapidly, with businesses showing a preference for working with smaller influencers (nano – 39% and micro – 30%) over costly macro-influencers (19%) and celebrities (12%).
Gone are the days when consumers used to watch and buy products endorsed by a celebrity. These celebrity-led mega-influenced campaigns have been all the rage in the marketing industry for years. However, It is difficult to gain the trust of today’s consumer. GenZ is not influenced by these mega influencers anymore. While celebrities still attract the attention of older generations, millennials and GenZ tend to follow influencers who they can identify with and relate to more on a personal level. They want influencers who genuinely use and believe in the products they promote, rather than those who are simply paid to endorse them.
Nielsen Scarborough, a USA-based market research company, found that only 19% of Americans make product purchases based on celebrity endorsements. More often, consumers want to hear from relatable voices, with 42% of Americans seeking the advice of others for purchase decisions.
In this case, does the significance of influencer marketing fade away? No, Micro and Nano influencers have emerged as key players in the influencer marketing world, making it more accessible to a broader audience.
More and more user-generated content and usability have caused a shift in consumer perception. The world of influencer marketing has seen a significant change in recent years, with brands moving away from traditional celebrity and macro-influencers and instead turning towards nano and micro-influencers.
Many Micro and Nano influencers started creating content as a hobby and later turned it into a source of income. With the pandemic-induced lockdowns leaving people with more free time, a new wave of nano influencers emerged, and they have since gained a significant market share in the influencer marketing space.
Micro and Nano influencers will be the future of digital marketing.
- Due to its higher power of advocacy, collaborating with influencers can be an effective way to reach and engage with a niche audience. However, in the current financial crunch with shrunk marketing budgets, brands need to make strategic investments. Micro and nano-influencers are cost-effective investment options for brands to consider.
- Associating with micro and nano influencers is also a much cheaper way to reach audiences than traditional advertising. Bringing a celebrity on board itself will cost the brand and may not always yield desired results. On the other hand, within the same budget or even less, the entire campaign can be executed by micro/nano influencers.
- While celebrities can be effective at driving brand awareness, blindly using celebrity power without considering their fit with your brand can lead to dilution of your brand's purpose and messaging. Micro and nano influencers have higher engagement with their audience in comparison to celeb/major influencers. As a result, they target specific communities and effectively reach people across different languages and cultures which resonate with their content.
- Beauty, fashion, food, travel and entertainment are the main sectors for influencer marketing. While premium brands may use celebrities to promote their products, the majority of the market is captured by middle-class users. To effectively target this audience base, brands need to bring someone who speaks their language. And by that, I mean, one who not only endorses their product or service but actually uses it. This develops trust among its users. Consumers trust these micro and nano influencers as they connect with their followers on a personal level and create more authentic and genuine recommendations. Brands like SUGAR Cosmetics, Lotus Herbals, Revlon, Meesho, Fortune Foods and WOW Skincare have already shifted their focus to micro and nano influencers to reach a wider audience and gain results.
- In the age of live social commerce; the majority of marketers are generating real revenue from influencer marketing. With strong returns, these micro and nano influencers are also becoming savvy, experimenting and figuring out newer ways to attract and engage with their audience and ultimately convert them into customers. While the traditional celebrity endorsement lacks the experimenting effort.
While these are the possible factors, why Macro and Nano influencers are growing, this doesn’t completely diminish the existence and relevance of Mega Influencers. India has over 80 million video creators, influencers, and bloggers who are building a community around their niche. As the influencer marketing industry continues to evolve, brands are moving away from solely relying on mega influencers and instead adopting a more diversified approach. Smart marketing companies ensure that their brand garners more attention while spending less money. Social media experts recommend a mix of working with mega, macro, micro and nano-influencers and allocating the budgets smartly. At the same time, it is important to collaborate with influencers who have a strong presence in the field a brand wants to expand in.
Views expressed are personal.
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